The California Natural Resources Agency (the Agency) has given notice that it intends to revise many of the regulations implementing the California Environmental Quality Act (the CEQA Guidelines). If adopted, the proposed rulemaking package would represent the most substantial amendments to the CEQA Guidelines in 20 years. The most significant proposed change shifts the methodology for studying projects’ potential traffic impacts and mitigation measures under CEQA.

Overall, the proposed rulemaking package contains additions or changes to approximately 30 different sections of the CEQA Guidelines and several of the appendices to the Guidelines. Stakeholders and members of the public will be able to provide oral or written comments on the proposed changes at public hearings on March 14, in Sacramento, and on March 15, in Los Angeles. Written comments on the proposed changes are due to the Agency on March 15, by 5:00 p.m. (emailed comments are preferred). The Agency is expected to make a final decision later this year.

This post highlights and explains a handful of the key proposed changes to the CEQA Guidelines.

Substance Changes

The amendments include various changes to CEQA’s substantive requirements, which will impact how analyses are conducted in environmental impact reports and how negative declarations are prepared under CEQA.

Transportation Impacts

Under CEQA, the standard approach to assessing a project’s potential transportation impacts has been to focus on automobile delay, as measured by level of service (LOS). However, in 2013, the California Legislature adopted Senate Bill 743 (SB 743), which in part obligated the Governor’s Office of Planning and Research (OPR) to develop proposed amendments to the CEQA Guidelines. The proposed amendments focused on promoting the reduction of greenhouse gas (GHG) emissions and recommending alternative methods of measuring transportation impacts under CEQA, including, but not limited to, vehicle miles travelled (VMT).

In response, the Agency is now considering OPR’s proposal to add Section 15064.3 to the Guidelines, providing that in most cases VMT is the most appropriate measure of transportation impacts. While the proposed updates state that the new procedures may be implemented immediately upon the effective date of the Guidelines, jurisdictions will have until January 1, 2020, to switch from LOS to VMT.

Specifically, proposed Section 15064.3, subdivision (a), clarifies that the primary consideration regarding transportation in an environmental analysis is the amount and distance that a project might cause people to drive and that automobile delay is generally not a significant effect on the environment. Subdivision (b) focuses on specific criteria for determining the significance of transportation impacts, discussing (i) land use projects, (ii) transportation projects, (iii) qualitative analysis, and (iv) methodology.

Notably, proposed subdivision (b)(1) describes factors indicating whether the amount of a project’s VMT may be significant. Projects within one-half mile of transit, or projects that decrease VMT in the project area, should be presumed to have a less than significant transportation impact. In addition, subdivision (b)(2) focuses on certain transportation projects, clarifying that projects that reduce VMT, such as pedestrian, bicycle, and transit projects, should be presumed to have a less-than-significant impact.

GHG Impacts

In 2009, as part of a package of amendments directed by Senate Bill 97 of 2007, the Agency added Section 15064.4 to the CEQA Guidelines. Section 15064.4 aimed to assist lead agencies in determining the significance of a project’s GHG emissions on the environment. The Agency now proposes amending several portions of existing section 15064.4, in part in response to several recent court decisions.

The proposed changes clarify that the lead agency’s analysis should focus on the reasonably foreseeable incremental contribution of the project’s emissions to the effects of climate change, rather than the quantity of emissions. The proposed changes clarify that an agency’s analysis must reasonably reflect evolving scientific knowledge and state regulatory schemes. In addition, the proposed changes state that in determining the significance of a project’s impacts, the lead agency may consider a project’s consistency with the state’s long-term climate goals or strategies, provided that substantial evidence supports the agency’s analysis of how those goals or strategies address the project’s incremental contribution to climate change. Finally, the proposed changes clarify that the lead agency has discretion to select the model or methodology it considers most appropriate to enable decision makers to take into account the project’s incremental contribution to climate change.

Energy Impacts

The proposed changes:

(1) Clarify that an environmental impact report (EIR) must analyze whether a project will result in significant environmental effects due to “wasteful, inefficient, or unnecessary consumption of energy”

(2) Further state that all aspects of the project must be considered in the analysis (including issues beyond building design, such as VMT)

(3) Signal that the analysis of energy impacts may need to extend beyond building code compliance

(4) Provide a cross-reference to direct lead agencies to the more detailed provisions contained in Appendix F

(5) Caution that energy impacts analysis is subject to the rule of reason, and must focus on energy demand that the project actually caused, as opposed to a full “lifecycle” analysis that would account for energy used in building materials and consumer products

Water Supply

The proposed changes incorporate the principles regarding the adequacy of a water supply analysis in CEQA described by the California Supreme Court in Vineyard Area Citizens for Responsible Growth v. City of Rancho Cordova (2007) 40 Cal.4th 412. In particular, Section 15155 would be amended to include a new subdivision setting forth the content requirements for a water supply analysis under CEQA. For instance, new subdivision (f) provides that when supplies for the project are uncertain, the analysis should address the environmental impacts of using alternative sources of supply, “at least in general terms.” In such instances, a lead agency may also consider project alternatives that require less water or curtailing later project phases as a mitigation measure.

Efficiency Changes

The proposed changes include several changes intended to improve the CEQA review process for agencies, project applicants, and the public.

Thresholds of Significance

A proposed change to CEQA Guidelines Section 15064.7 provides that lead agencies may use regulatory standards as thresholds of significance. In order to serve as a threshold, the standard must: (1) be adopted by some formal mechanism; (2) be adopted for environmental protection; (3) govern the impact at issue; and (4) govern the project type.

In addition, a proposed change to Section 15064 provides that an agency that relies on a threshold to determine the significance of an impact should explain how applying the threshold indicates a less-than-significant effect. The update to Section 15064 recognizes the court’s caution in Protect the Historic Amador Waterways v. Amador Water Agency (2004) 116 Cal.App.4th 1099, 1108-1109, that thresholds cannot be used to determine automatically whether an effect will be significant.

The proposed changes include clarifications to CEQA Guidelines Appendix G, including sections regarding aesthetics, biological resources and state wetlands, cultural resources, energy, impervious surfaces, geology and soils, groundwater, land use plans, population growth, transportation, water supply; and wildfire. These updates include, among other changes, replacing subjective questions with a focus on objective criteria and increasing clarity.

Several of the proposed changes intend to clarify the existing programmatic environmental review process for use in later projects. Specifically, they seek to clarify the rules on tiering and implement several judicial opinions that address the issue of whether a later activity falls within the scope of a previously certified program EIR. (See, e.g., Citizens for Responsible Equitable Environmental Development v. City of San Diego Redevelopment Agency (2005) 134 Cal.App.4th 598, 610; Sierra Club v. County of Sonoma (1992) 6 Cal.App.4th 1307, 1320-1321.)

CEQA Exemptions

The proposed changes include several expansions on existing exemptions. Consistent with SB 743, the proposed changes expand Section 15182’s existing CEQA exemption — which applies to projects implementing a specific plan that has already undergone CEQA review — to include commercial and mixed-use projects near transit. The expanded exemption is available to projects that are located near transit, and is consistent with regional plans for reducing GHG emissions. Additionally, the proposed changes clarify that the exemption will not apply if the project triggers one of the requirements for further review in CEQA Guidelines Section 15162 (e.g., changed project or circumstances).

Two additional proposed changes focus on CEQA Guidelines Section 15301, which addresses the CEQA exemption for altering existing facilities. The first change would expand the exemption’s use to all existing facilities with a history of productive use — even and including vacant facilities. The second proposed change would promote pedestrian, bicycle, and streetscape improvements within an existing right-of-way, consistent with the Complete Streets Act of 2008, which requires cities and counties to plan for the needs of all users of their streets.

Technical Changes

Finally, the proposed updates include many technical changes to conform to recent cases and statutory developments. A few key changes are highlighted below. The Agency is also considering amendments to the responses to comments, as well as notice of determination or notice of exemption processes, common sense exemption, and determination of a lead agency by agreement, among other technical amendments.

Baseline

The Agency proposes adding a new sentence to Guidelines Section 15125 indicating that the purpose of a baseline environmental setting is to provide decision makers and the public with an accurate picture of a project’s near-term and long-term impacts. The new sentence intends to inform lead agencies that, depending on the project, they may need to choose between alternative baselines, and should ultimately pick the baseline that best informs decision makers and the public of a project’s likely impacts. (See Neighbors for Smart Rail v. Exposition Metro Line Construction Authority (2013) 57 Cal.4th 439, 455.)

In addition, the changes inform lead agencies that they may look to historical conditions to establish a baseline if existing conditions fluctuate and are hard to measure accurately. (See Communities for a Better Environment v. South Coast Air Quality Management Dist. (2010) 48 Cal.4th 310, 327-28.) The proposed changes also clarify that lead agencies may describe both existing conditions and projected future conditions in establishing a baseline if, for example, “changing background conditions during the project’s lengthy approval and construction period are expected to affect the project’s likely impacts.” (Neighbors for Smart Rail, supra, 57 Cal.4th at 453.)

Deferred Mitigation

The proposed changes clarify that the identification of mitigation measures may never be deferred, unless as part of a future regulatory process if compliance is mandatory and substantial evidence confirms the regulatory process would achieve the performance standards. In addition, the proposed changes indicate that specific details of a mitigation plan may be deferred if fully formulating the mitigation plan at the time of project approval is impractical or infeasible. However, to defer plan details, the agency must: (1) commit to mitigation; (2) adopt specific performance standards that the mitigation will achieve; and (3) provide a list of possible mitigation actions that will be considered, analyzed, and potentially incorporated into the mitigation measure. Deferral may also be appropriate when another regulatory agency is required to issue a permit for the project and that agency is expected to impose mitigation requirements independent of the CEQA process. These proposed changes are intended to implement a long line of case law from the past 20 years regarding the standards for deferred mitigation under CEQA.

Project Objectives

Currently, Section 15124(b) states that a project description shall include a statement of the project’s objectives. The proposed changes seek to clarify that the project objectives may also discuss the proposed project’s benefits to ensure the project description allows decision makers to balance, if needed, a project’s benefit against its environmental cost.

Discretionary Projects

Currently, a discretionary project is defined as one involving the exercise of judgment or deliberation by a public agency. The proposed changes to Section 15357 would clarify that the definition of “discretionary” in the Guidelines may need to be read in context with other statutes, and does not apply to governmental decisions that merely determine conformity with a set of standards without exercising judgment as to the wisdom of executing the project. (See Health First v. March Joint Powers Authority (2009) 174 Cal.App.4th 1135.) In addition, the proposed changes seek to clarify that a discretionary project is one in which a public agency can shape the project in any way to respond to concerns raised in an environmental impact report.

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